AI Alone is not a Competitive Advantage

I just listened to a recent episode of the Harvard Business Review IdeaCast podcast "Why AI Isn't Enough to Beat the Competition" and the key points resonated with me.

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In particular, it was the premise that early adoption of widely available new technology rarely yields sustained returns.  I speak to leaders regularly who are feeling pressured to not only adopt but also invest in AI now - right now - to stay relevant. However, this urgency may be misplaced. Here's why:

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• Every day we see a new application of AI: from research and analysis to writing to coding to market research to improving customer service. The most obvious benefits today are largely efficiency-oriented: making manual processes automated, sometimes more cost effective, or processing large amounts of data incredibly fast.  
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• AI is widely available, reducing costs for anyone who applies it generically. This is why AI is unlikely to create long-term competitive advantage for your business UNLESS a) it is applied to unique core competencies and b) this is done in a way that is hard to replicate.

The distinction between optimization (leveraging tech to do what you're doing but more efficiently) and innovation (doing new things to create new value) is crucial.  

The “first-mover advantage” for us small and medium sized businesses has less to do with AI itself and more to do with your ability to adapt quickly and experiment with it to improve upon your existing capabilities. This is how most of us can derive value from AI in the short term.

So, what should we do?
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1. Define your approach to AI (and, I would argue, to Innovation in general) within your strategic plan.
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2. Focus on learning and education, including rules and policies for AI use.
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3. Start with low-risk experiments targeting specific problems. Remember, if you have five hundred employees, you’re likely already running 1000 daily mini pilots without realizing it.

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The key to not falling behind is to align AI with your corporate strategy and leverage it against your unique advantages. But most importantly, experiment with driving efficiency of scale and streamlining of operations.  

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If you're struggling with this, consider seeking expert help to develop a customized roadmap that maximizes both optimization and innovation potential. Let’s talk!  

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